Practical Money Matters - Senior Year Sticker Shock

POSTEDMay 31, 2011 11:38 p.m.

Parents, if your high school senior is about to graduate, you have my heart-felt congratulations — and my sympathy. As your checkbook can attest, this has been an expensive year and it’s not over yet. You’re probably still facing graduation gifts and many other expenses.For those whose children are juniors, start planning and budgeting now for next year. Here are some expenses you can anticipate:Senior prom can be one of the year’s biggest expenditures. According to a recent national survey conducted by Visa Inc., families expect to spend an average of $807 on prom-related expenses this year. These might include:• New prom dresses often cost $100 to $500 or more.• Another couple hundred for shoes, accessories, flowers and professionally styled hair, nails and make-up.• New tuxedos cost several hundred dollars, not to mention formal shirt, tie, studs and shoes. Even renting them could run over $150.• Figure at least $100 an hour plus tip to rent a limousine for a minimum of four hours.• Prom tickets typically cost $50 to $150 per person, depending on venue, entertainment, meals, etc.• Budget at least $40 for a nice meal.• After-parties can run anywhere from a few bucks at the bowling alley to hundreds for group hotel suites.

Prom is only one component of the senior-year experience. Talk to recent graduates and their parents about expenses they faced and their lessons learned. Decide early on which expenses are essential and which ones you can do without.For example, if your child is college bound, entrance exams, study guides and tutoring are important, but can quickly add up:The Scholastic Aptitude Test (SAT) costs $47 each time it’s taken, plus an additional $10 to $21 per individual subject test.American College Testing (ACT) costs $33, plus another $15 for the writing test.A comprehensive online SAT review course from the Princeton Review will set you back $599.Personalized individual and small group tutoring sessions can cost thousands of dollars.

Other common senior year expenses include:• College application fees – often $40 to $80 per institution.• For site visits at schools outside the area, costs can vary widely. Don’t forget airfare, gas, lodging, meals, local transportation, etc.• Senior portraits and prints often cost hundreds of dollars.• Graduation announcements, thank-you notes and postage – could be $100-plus.• Senior class dues.• Yearbooks can run $35 to $85, plus additional fees if you take out a congratulatory ad.• Class rings – different styles often run $100 to $500 or more.• Cap and gown – usually $25 to $50.• Graduation gift and party – it’s up to you to manage expectations.

You want to ensure your child has a memorable senior year, but not at the expense of your overall budget. Before the school year begins, create a senior-year budget and get your kid involved in the tough decisions, prioritizing expenses from vital to non-essential. Learning the importance of setting and sticking to a budget is a valuable life lesson for your kids.If you need help making a budget, numerous online tools are available online at sites such as the U.S. Financial Literacy and Education Commission’s MyMoney.gov (www.mymoney.gov), the National Foundation for Credit Counseling (www.nfcc.org) and Practical Money Skills for Life (www.practicalmoneyskills.com), a free personal financial management program run by Visa Inc.